Figure 12-3 -Refer to Figure 12-3. If the aggregate demand curve is AD2, which of the following is the most appropriate discretionary fiscal policy to pursue?

A) a contractionary fiscal policy involving reductions in government spending and decreases in income tax rates B) a contractionary fiscal policy involving reductions in government spending and increases in income tax rates C) an expansionary fiscal policy involving increases in government spending and increases in income tax rates D) an expansionary fiscal policy involving increases in government spending and decreases in income tax rates A) a contractionary fiscal policy involving reductions in government spending and decreases in income tax rates B) a contractionary fiscal policy involving reductions in government spending and increases in income tax rates C) an expansionary fiscal policy involving increases in government spending and increases in income tax rates D) an expansionary fiscal policy involving increases in government spending and decreases in income tax rates

Figure 12-4 -Refer to Figure 12-4. If the economy's long-run aggregate supply curve is LRAS1, then at Jprice level P1 and real GDP level YP1, there is

A) an inflationary gap. B) an opportunity to use discretionary fiscal or monetary policy to improve the economy. C) no gap, but the economy is not at its natural level of employment. D) no gap, and the economy is at its natural level of employment. A) an inflationary gap. B) an opportunity to use discretionary fiscal or monetary policy to improve the economy. C) no gap, but the economy is not at its natural level of employment. D) no gap, and the economy is at its natural level of employment.

Figure 12-4 -Refer to Figure 12-4. If the economy is initially at Y1, supply-side economists would Jadvocate

A) lower taxes to encourage people to work more. B) reductions in investment tax credits to stimulate capital formation. C) tax increases to encourage more people to work. D) increased transfer payments to help the unemployed. A) lower taxes to encourage people to work more. B) reductions in investment tax credits to stimulate capital formation. C) tax increases to encourage more people to work. D) increased transfer payments to help the unemployed.

Exam 12: Government and Fiscal Policy

Which of the following best explains why a $10 billion increase in transfer payments has a smaller impact on aggregate demand than a $10 billion increase in government purchases?

(Multiple Choice)

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Question 81

Discuss and explain the concepts of the federal deficit and the national debt. How statistically Jsignificant are they for the United States as compared to other countries? Explain how the deficits and the debt arise.

(Essay)

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Question 82

Suppose Congress increases the corporate profit tax rates. This is an example of

(Multiple Choice)

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Question 83

The bulk of federal receipts come from

(Multiple Choice)

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Question 84

Figure 12-3 -Refer to Figure 12-3. If the aggregate demand curve is AD₂, which of the following is the most appropriate discretionary fiscal policy to pursue?

(Multiple Choice)

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Question 85

Expansionary fiscal policy leads to

(Multiple Choice)

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Question 86

Suppose an economy has a recessionary gap. Ja. Illustrate this using a graph with LRAS, SRAS, and AD curves. Identify the equilibrium price level, real GDP, and the output gap in your diagram. Be sure to label your diagram fully. Jb. Identify two fiscal policy tools which may be used to eliminate the gap. Jc. Explain in words how these tools will affect the aggregate demand, long-run aggregate supply, and short-run aggregate supply curves. Jd. Incorporate into your graph, the relevant shifts in the curves that would take place when expansionary fiscal policy is used to eliminate the recessionary gap.

(Essay)

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Question 87

Expansionary fiscal policy leads to an increase in net exports, all other things unchanged.

(True/False)

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Question 88

A change in government purchases shifts the aggregate demand curve by an amount equal to the

(Multiple Choice)

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Question 89

The crowding-out effect refers to which of the following?

(Multiple Choice)

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Question 90

As discussed in the Case in Point on the size of the fiscal multiplier, a study conducted by Jonathan Parker on the effect of fiscal policy during recessions suggests that

(Multiple Choice)

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Question 91

Discretionary fiscal policy refers to

(Multiple Choice)

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Question 92

The use of government expenditures and taxes to influence the level of economic activity is called fiscal policy.

(True/False)

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Question 93

Suppose the government increases government purchases and there is some crowding out. JAs a result

(Multiple Choice)

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Question 94

Suppose an economy has an inflationary gap. Ja. Illustrate this using a graph with LRAS, SRAS, and AD curves. Identify the equilibrium price level, real GDP, and the output gap in your diagram. Be sure to label your diagram fully. Jb. Identify two fiscal policy tools which may be used to eliminate the gap. Jc. Explain in words how these tools will affect the aggregate demand, long-run aggregate supply, and short-run aggregate supply curves. Jd. Incorporate into your graph, the relevant shifts in the curves that would take place when expansionary fiscal policy is used to eliminate the recessionary gap.

(Essay)

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Question 95

The provision of aid to an individual who is not required to provide anything in exchange is called a transfer payment.

(True/False)

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Question 96

State and local tax receipts are dominated by

(Multiple Choice)

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Question 97

Figure 12-4 -Refer to Figure 12-4. If the economy's long-run aggregate supply curve is LRAS₁, then at Jprice level P₁ and real GDP level Y_P1, there is

(Multiple Choice)

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Question 98

Changes in expenditures and taxes that occur through automatic stabilizers

(Multiple Choice)

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Question 99

Figure 12-4 -Refer to Figure 12-4. If the economy is initially at Y₁, supply-side economists would Jadvocate

(Multiple Choice)

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Question 100

Showing 81 - 100 of 181

Which of the following best explains why a $10 billion increase in transfer payments has a smaller impact on aggregate demand than a $10 billion increase in government purchases?

Discuss and explain the concepts of the federal deficit and the national debt. How statistically Jsignificant are they for the United States as compared to other countries? Explain how the deficits and the debt arise.

Suppose Congress increases the corporate profit tax rates. This is an example of

The bulk of federal receipts come from

Figure 12-3 -Refer to Figure 12-3. If the aggregate demand curve is AD₂, which of the following is the most appropriate discretionary fiscal policy to pursue?

Expansionary fiscal policy leads to

Expansionary fiscal policy leads to an increase in net exports, all other things unchanged.

A change in government purchases shifts the aggregate demand curve by an amount equal to the

The crowding-out effect refers to which of the following?

As discussed in the Case in Point on the size of the fiscal multiplier, a study conducted by Jonathan Parker on the effect of fiscal policy during recessions suggests that

Discretionary fiscal policy refers to

The use of government expenditures and taxes to influence the level of economic activity is called fiscal policy.

Suppose the government increases government purchases and there is some crowding out. JAs a result

The provision of aid to an individual who is not required to provide anything in exchange is called a transfer payment.

State and local tax receipts are dominated by

Figure 12-4 -Refer to Figure 12-4. If the economy's long-run aggregate supply curve is LRAS₁, then at Jprice level P₁ and real GDP level Y_P1, there is

Changes in expenditures and taxes that occur through automatic stabilizers

Figure 12-4 -Refer to Figure 12-4. If the economy is initially at Y₁, supply-side economists would Jadvocate

Economics: the Study of Choice

Demand and Supply

Applications of Demand and Supply

Macroeconomics: the Big Picture

Measuring Total Output and Income

Aggregate Demand and Aggregate Supply

Economic Growth

The Nature and Creation of Money

Financial Markets and the Economy

Monetary Policy and the Fed

Consumption and the Aggregate Expenditures Model

Investment and Economic Activity

Net Exports and International Finance

Inflation and Unemployment

A Brief History of Macroeconomic Thought and Policy

Inequality, Poverty, and Discrimination

Economic Development

Socialist Economies in Transition

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